Pakistan
to offer 20 offshore blocs for oil and gas exploration at London
conference

By ASHRAF KHANMay 09 - 15, 2005

After remaining one of the least explored regions,
Pakistani authorities have now shifted their focus to far-flung
Americas in a hope to lure exploratory companies into the country. The
President of Pakistan made a surprising visit to Latin American
countries late 2004 including Argentina and Brazil. This was
first-ever visit of any head of state from Pakistan and as such
nothing magically happened except signing of few protocols. However,
in the area of oil & gas, it appears that the agenda was well
thought of and planned much prior to the stated visit. G. A. Sabri,
Director General — Petroleum Concessions (DGPC) also made a part of
the presidential team which later joined by Munsif Raza, Managing
Director — Pakistan Petroleum Limited (MD PPL) and his four-key
staff members who were summoned for discussions with relevant
officials of Petrobras. The company performs exploration and
production work in seven countries including Angola, Bolivia,
Colombia, Nigeria, Trinidad and Tobago and the US.

Early April 2005, Brazilian Ambassador called upon
Minister for Petroleum & Natural Resources where the Minister
formally invited Petrobras team to Pakistan. The mission did come
immediately and spent a week or so meeting with Ministry officials and
oil & gas companies including OGDCL and PPL.

Recently, Petrobras has progressed in its
international growth strategy when it acquired the Argentinean
companies of Petrolera Santa Fe and Perzez Companc, the largest
independent oil company in Latin America. Now, Petroleo Brasileiro SA,
Brazil's state-controlled oil producer, is studying offshore oil and
natural gas exploration in Pakistan after company officials visited
the country recently

The Head of Petrobras delegation Adauto Cameiro
Pereira held talks with Pakistani officials for exploring areas of
cooperation between the two countries, especially in offshore
exploration,' according to the Web site of Pakistan Ministry of
Petroleum & Natural Resources. The visit by Petrobras officials to
Pakistan, the first by a Brazilian oil and gas company, comes after
Pakistan's President Pervez Musharraf meets Brazilian President Luiz
Inacio Lula da Silva in November.

EXPLORATION SCENARIO

Government is trying to offer an attractive package
of incentives to the investors in the onshore and offshore oil, gas
exploration and production activities and invited many companies.

Pakistan is planning to offer 20 offshore blocs for
oil and gas exploration at a conference next week in London. At least
150 oil and gas exploration firms likely to attend the conference.

The ministry officials said that 20 blocs to be
offered for bidding are in an offshore area called the Indus Basin,
off southern Sindh. The ministry would also award six new licences
worth $44 million to foreign companies, all European, to explore for
oil and gas in the Indus Basin.

The directorate general petroleum concession has
already selected four foreign firms to award six concessions in the
Indus Basin. Those blocs are other than the 20 the government planned
to offer.

London-based Tullow Oil Pls and Paige Limited will
be awarded two exploration licences each, while one concession each
will be granted to Premier Oil Pakistan and Natvus.

The government is said to have achieved target to
bring $80 million foreign investment in the exploration sector during
the fiscal year 2004-05 and expected some good response at the London
conference. Pakistan's liberal exploration policy has attracted
interest from foreign firms in recent years, making oil and gas the
largest foreign investment area.

Foreign firms including Total of France and
Austrian OMV are involved in exploration and production of
hydrocarbons in the country. But an unsuccessful attempt by a
consortium led by French oil major Total to find hydrocarbons in deep
water off Karachi last year was a blow for efforts to attract
investment.

Pakistan imports 85 percent of its energy needs,
including about $3 billion worth of crude a year, and is struggling to
increase domestic oil production of about 65,000 barrels a day. It
hopes to produce 100,000 barrels a day within five years.

Pakistan also produces 3.5 billion cubic feet of
natural gas a day, which meets 50 percent of its total energy needs.

The government had set a target of drilling 100
exploratory wells this year, compared with an average of 55 to 60 a
year previously. Pakistan's s proven oil reserves stand at 800 million
barrels and scientifically estimated potential reserves of 27 billion
barrels. Proven gas reserves are 45 trillion cubic feet and
scientifically estimated reserves at 450 trillion cubic feet.